Burning money has just begun.
Editor’s note: This article is from WeChat public account “Three Cultural Entertainment” (ID: hi3wyu ), Author Dkphhh.
Disney + Although the number of users is good, burning money has just begun. Due to the epidemic, both Disney’s film and park business in China will be greatly affected.
In the early morning of February 5, Disney released the first quarter of fiscal year 2020 as of December 28, 2019:
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Revenue was US $ 20.858 billion, up 36% year-on-year.
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Net profit was US $ 2,107 million, a 23% decrease year-on-year, and basically unchanged from market expectations.
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Diluted earnings per share were $ 1.53, higher than analysts’ expectations of $ 1.44.
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Disney’s performance this quarter continues the trend of revenue growth and profit decline in the past year.
During the reporting period, Disney + ‘s streaming media platform Disney + was officially launched, and the root cause of the decline in revenue growth and profits also came from the streaming media business that Disney + belongs to.
After the launch of Disney +, as of the end of the period, there have been 26.5 million subscribers. As a result, Disney ’s subscription fee income has increased significantly, reaching $ 1.326 billion, but at the same time, it must bear huge operating costs. This cost is greater than revenue. DTCI’s operating profit for the period was negative 693 million yuan.
With Disney +The streaming media business represented will not contribute to profits in the short term and will add a lot of pressure. Currently, most of the content on Disney + comes from Disney and the acquired Fox content library, but Disney must add additional content investment to produce exclusive content.
According to previous “variety” statistics, Disney’s total investment in original content in 2019 reached 27.8 billion US dollars.
Either film or animation, or animation, the time span from project establishment to launch is as short as 2, 3 years, and as long as 5 or 6 years. This has a significant impact on Disney’s cash flow.
As of the end of the period, Disney’s operating cash flow was US $ 1.63 billion, a 22.34% decrease compared to the same period last year and a 72.76% decrease from the previous period.
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Overall, Disney ’s quarterly performance has been stable and steadily. Apart from the more comprehensive disclosure of DTCI business, there are no bright spots and it is relatively flat. More curious than now is what kind of transcripts Disney can deliver in the next few quarters.
DTCI: Disney + has won the start, but it ’s only just started
DTCI division includes Disney ’s streaming media business and overseas TV station business. This quarter ’s revenue was US $ 3.987 billion, a four-fold increase from US $ 918 million in the same period last year. This number seems to have increased a lot, but it actually increased The reason is simple:
One is that Fox and National Geographic’s overseas TV business is included in the statistics. Cable operators’ joint venture fees, advertising revenue, and licensing revenue for television and streaming media have all increased significantly.
The second is that Hulu is included in the statistics, Disney + is online, and subscription fees have also increased significantly.
Looking at the month-on-month basis, DTCI’s revenue in the last quarter was US $ 3.428 billion, an increase of 16%, which was actually not that much.
As for profit, this department has no profit since its establishment, it has been losing money, and the more it loses, the more it loses. Because now the entire streaming media business requires large-scale investment.
According to data disclosed by Disney in its financial report, as of the end of the period, Disney + paid subscriptions reached 26.5 million, ESPN + had 6.6 million paid subscribers, and Hulu’s total paid subscribers reached 30.4 million.
Disney’s several streaming media charging methods are more complicated. In addition to direct single subscriptions, there are three-in-one subscription packages and cable TV packages.
Disney-defined paid subscribers are users who actually pay the fee, so users who qualify for free are not counted, but users who have enjoyed preferential conditions are also included.
According to this standard, Disney + was launched in less than two months, and the actual number of users should be much higher than 26.5 million. This result is already very good. It took Netflix 4 years to reach this level of subscribers, and it took Hulu 12 years to reach this number of subscribers.
Disney also revealed monthly average ARPPU for three streaming platforms. Disney + has US $ 5.56, ESPN + has US $ 4.44, Hulu pure streaming media has an average monthly ARPPU of US $ 13.15, and the package with Live TV is US $ 59.47.
However, with the exception of the final Live TV package, the monthly fees for several other packages have declined. This is mainly due to the three-in-one package introduced by Disney.
When Disney + went live, Disney launched a package that included Disney +, ESPN +, and Hulu advertising, at $ 12.99 / month.
From the perspective of the growth of users of the three services, the effect of this integration package is still very good, especially Hulu. In the last two quarters of 2019-that is, officially acquired by Disney, users rose 4 million .
DTCI ’s operating costs for the fiscal quarter were as high as US $ 3.529 billion, accounting for nearly 90% of revenue. Disney claims that production costs for this fiscal season increased by $ 2.433 billion to $ 2.879 billion. Increase in program production costs
